Beyond the fields of berries, grass seed, and wheat at Jacque Duyck Jones’s farm in Oregon, she can see distant plumes of exhaust spewing from factories in Hillsboro, just outside Portland. Years ago, Jones and her family didn’t worry much about industry creeping closer to their land. A 50-year-old state law that restricts urban growth, rare in the United States, kept smokestacks and strip malls away.
But a national push to make semiconductors — the microchips that help power modern electronics, from dishwashers to electric vehicles — has prompted Oregon lawmakers to lift some of those restrictions. Keen to tap into $52 billion that Congress earmarked last year in the CHIPS and Science Act, Oregon legislators last week passed a bipartisan bill aimed at enticing chip manufacturers to set up shop in the state, in part by allowing them to convert some of the country’s richest farmland into factories. The bill gives Governor Tina Kotek, a Democrat, authority through the end of next year to extend urban development boundaries, a process currently subject to appeals that can be drawn out for years.
“That’s like granting divine power,” said Ben Williams, president of Friends of French Prairie, a rural land advocacy group. Under the bill, the governor can select two rural sites of more than 500 acres and six smaller ones for development related to the semiconductor industry. That revision to the state’s rigid land-use system has drawn pushback from farmers and conservation organizations. They say the legislation endangers farms, soil health, and carbon sequestration efforts. One potential site for a factory would pave over rural land within a mile of the Duyck family’s land.
“I am worried,” Jones said. “When [the CHIPS Act] was passed at the federal level, here in Oregon we never imagined it would result in basically a choice. I would have never imagined it to have been a threat to farmland in Oregon,” she added, noting that she doesn’t oppose the industry, only building factories on agricultural lands.
With bipartisan support, President Joe Biden signed the CHIPS Act last year intending to jumpstart semiconductor manufacturing in the United States, where 37 percent of the world’s chips were made in 1990, compared to only 12 percent in 2020, according to the Semiconductor Industry Association. Politicians from across the political spectrum lauded the CHIPS Act as a job creator and a way to shore up the semiconductor supply chain during a global shortage.
Semiconductors are in microwaves and smartphones, but they are also essential for renewable energy technology. They’re key to solar panels, wind energy systems, heat pumps, microgrids, electric vehicles, and more. In a report published last year, the U.S. Department of Energy called semiconductors “a cornerstone technology of the overall decarbonization strategy” and said a lower-carbon future requires “explosive growth” of both conventional and more advanced chips.
In Oregon, cashing in on the federal bill won’t necessarily mean bolstering a domestic supply of wind turbines or solar panels, which are mostly manufactured in China. In large part, the chips made in the state, which is already a hub for the industry, are used in computers and high-tech products like electronic gaming and artificial intelligence, according to Arief Budiman, director of the Oregon Renewable Energy Center.
Supporters of the Oregon bill say capturing the CHIPS Act windfall could create tens of thousands of jobs and more than $1.5 billion in local and state tax revenue.
“Imagine electric and autonomous vehicles, biotech, clean tech, and others doing research and advanced manufacturing here,” the Oregon Semiconductor Competitiveness Task Force said in a report last August. “In short, acting now could spark a boom that lasts another 30 years.”
To stay attractive to industry giants like Intel, which already has an Oregon campus but recently chose to build a $20 billion mega-factory in Ohio (to the dismay of Oregon’s elected officials), the state needs to make more industrial land available, the task force said. It described “no development ready sites of the size needed to attract a major semiconductor investment, or to support larger size suppliers.”
Rural land-use advocates largely reject that argument. One group — 1,000 Friends of Oregon — has listed several existing industrially zoned sites that could be used for chip factories. The Oregon Farm Bureau, which opposes the land-use provisions in the state bill, also argues there’s already enough available land within urban growth areas to build new factories, said Lauren Poor, the bureau’s vice president of government and legal affairs. “We’re not opposed to the chips bill, generally speaking,” Poor said. But “once we develop these sites, we can’t get that soil back.”
Wet winters and dry, warm summers help the state’s growers produce some 200 crops, ranging from hops to hay. Oregon dominates other states in blackberry, crimson clover, and rhubarb production, and almost all of the country’s hazelnuts are grown there. “We owe that to the diversity of our climate and our soils, which is one of the reasons we’re very protective of our very unique land-use system,” Poor added.
The state’s land-use restrictions are rooted in the country’s first law establishing urban growth boundaries, which former Governor Tom McCall, a Republican, signed in 1973. The law, aimed at limiting urban sprawl, allows cities to expand only with approval from a state commission. A decision to move boundaries can be appealed multiple times at both the county and state levels, Williams said. Under the new bill, challenges to the governor’s chip-factory designations will be considered only by the state supreme court.
“It’s very detrimental to expand outside the urban growth boundaries,” said Jones, the farmer. She worries building chip factories on farmland could increase nearby property values, making arable land harder for farmers to buy or rent, and could supplant not only rows of crops but essential farm infrastructure like seed-cleaning sites.
Aside from tweaking Oregon’s special land-use laws, state legislators are considering a bill that would fund nature-based climate solutions, like storing carbon in agricultural soil. Poor said the two bills seem to run counter to each other. “What do you want from us? Do you want us to sequester your carbon, or do you want to pave over our farmlands?”